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[Request for Reconsideration of Protest of VA Purchase Order Cancellation]

B-254920.3 Published: May 02, 1994. Publicly Released: May 02, 1994.
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Highlights

A firm requested reconsideration of its denied protest of a Department of Veterans Affairs (VA) purchase order cancellation. GAO had held that VA properly: (1) suspended the protester's purchase agreement; (2) requested revised quotes from the bidders; and (3) selected the low bidder. In its request for reconsideration, the protester contended that the awardee improperly offered a discount in its revised bid. GAO held that the protester should have challenged the awardee's revised bid in its original protest. Accordingly, the request for reconsideration was denied.

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B-219290, SEP 26, 1986

DEBT COLLECTIONS - WAIVER - COMPENSATION OVERPAYMENTS DIGEST: TWENTY-TWO EMPLOYEES OF NASA RECEIVED MERIT INCREASES UNDER THE PERFORMANCE MANAGEMENT RECOGNITION SYSTEM (PMRS) DURING THE PERIOD FROM OCTOBER 1984 TO JANUARY 1985. HOWEVER, GUIDANCE IN FEDERAL PERSONNEL MANUAL BULLETIN 540-27, DECEMBER 11, 1984, AND SUBSEQUENT REGULATIONS PRECLUDED THE GRANTING OF PMRS MERIT INCREASES TO EMPLOYEES MOVING INTO THE PMRS WHO HAD RECEIVED A PROMOTION, WITHIN-GRADE INCREASE, OR QUALITY STEP INCREASE WITH IN 90 DAYS OF THE EFFECTIVE DATE OF THE MERIT INCREASE. THESE NASA EMPLOYEES WERE NOT ENTITLED TO RECEIVE PAY INCREASES WHICH WERE SPECIFICALLY PRECLUDED BY REGULATIONS ISSUED BY THE OPM TO IMPLEMENT THE PMRS. THE OVERPAYMENTS OF SALARY TO THE 22 EMPLOYEES MAY BE CONSIDERED FOR WAIVER BY THE AGENCY UNDER THE AUTHORITY OF 5 U.S.C. SEC. 5584 (1982).

NASA EMPLOYEES - ENTITLEMENT TO MERIT INCREASES:

THIS DECISION IS IN RESPONSE TO A REQUEST BY THE ADMINISTRATOR, NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA), FOR A DECISION AS TO WHETHER CERTAIN EMPLOYEES OF THE AGENCY WERE ENTITLED TO MERIT INCREASES UNDER THE PERFORMANCE MANAGEMENT RECOGNITION SYSTEM (PMRS) BETWEEN OCTOBER 1984 AND JANUARY 1985, IN LIGHT OF INTERIM REGULATIONS ISSUED BY THE OFFICE OF PERSONNEL MANAGEMENT (OPM) WHICH IMPLEMENTED THE PMRS AND WHICH PRECLUDED SUCH INCREASES. FOR THE REASONS STATED LATER IN THIS DECISION, WE HOLD THAT THE AFFECTED EMPLOYEES WERE NOT ENTITLED TO RECEIVE THE MERIT INCREASES. THE ERRONEOUS OVERPAYMENTS OF SALARY MAY BE CONSIDERED FOR WAIVER BY THE AGENCY UNDER THE PROVISIONS OF 5 U.S.C. SEC. 5584 (1982).

THE PMRS WAS ESTABLISHED BY TITLE II OF THE CIVIL SERVICE RETIREMENT SPOUSE EQUITY ACT OF 1984, PUBLIC LAW 98-615, 98 STAT. 3195, 3207-3217, APPROVED NOVEMBER 8, 1984. THE EFFECTIVE DATE OF TITLE II OF THE ACT WAS RETROACTIVE TO OCTOBER 1, 1984, AND REQUIRED THAT MERIT INCREASES BE GRANTED AT THE BEGINNING OF THE FIRST PAY PERIOD COMMENCING ON OR AFTER OCTOBER 1, 1984. FOR EMPLOYEES OF NASA, THE ADMINISTRATOR OF NASA STATES THAT THE APPLICABLE DATE WAS OCTOBER 14, 1984.

AFTER CONGRESS HAD PASSED THE PMRS LEGISLATION BUT BEFORE THE PRESIDENT HAD SIGNED THE BILL, OPM ISSUED AN INTERAGENCY ADVISORY GROUP LETTER DATED OCTOBER 12, 1984, PROVIDING INITIAL GUIDANCE TO AGENCIES AS TO WHAT ACTIONS WOULD BE NECESSARY TO IMPLEMENT THE PMRS LEGISLATION. THE ADMINISTRATOR OF NASA POINTS OUT THAT THERE WAS NO DISCUSSION IN THIS INITIAL GUIDANCE OF ANY CATEGORY OF EMPLOYEES WHO WOULD NOT BE ELIGIBLE TO RECEIVE MERIT INCREASES, FOR EXAMPLE, EMPLOYEES WHO, UPON MOVEMENT INTO THE PMRS, ARE UNRATABLE AND WHO HAVE RECEIVED AN INCREASE IN BASE PAY (PROMOTION, WITHIN-GRADE INCREASE, OR QUALITY STEP INCREASE) WITHIN 90 DAYS OF THE EFFECTIVE DATE OF THE MERIT INCREASES. THE EXCLUSION OF A SPECIFIC CATEGORY OF EMPLOYEES FIRST APPEARED IN ATTACHMENT 2 TO FEDERAL PERSONNEL MANUAL (FPM) BULLETIN 540-27, DATED DECEMBER 11, 1984.

THE PERTINENT PROVISION IN FPM BULLETIN 540-27 STATES THAT AN EMPLOYEE MOVING INTO THE PMRS ON OR BEFORE THE EFFECTIVE DATE OF A MERIT INCREASE WILL NOT RECEIVE A MERIT INCREASE FOR THAT FISCAL YEAR IF THE EMPLOYEE RECEIVED AN INCREASE TO BASE PAY (PROMOTION, WITHIN GRADE INCREASE, QUALITY STEP INCREASE) WITHIN 90 DAYS OF THE EFFECTIVE DATE OF THE MERIT INCREASE. THIS EXCLUSIONARY LANGUAGE WILL BE REFERRED TO AS THE "90-DAY RULE."

PRIOR TO RECEIPT OF THIS FPM BULLETIN, SEVERAL NASA INSTALLATIONS GRANTED MERIT INCREASES TO EMPLOYEES BY APPLYING EXISTING MERIT PAY REGULATIONS AND THE INTERAGENCY ADVISORY GROUP GUIDANCE OF OCTOBER 12, 1984. AFTER RECEIPT OF THE DECEMBER 11 FPM BULLETIN, NASA OFFICIALS MET WITH OFFICIALS OF OPM TO DISCUSS AND EXPLORE, AMONG OTHER THINGS, THE IMPLEMENTATION OF THE 90-DAY RULE. BY THE TIME NASA HEADQUARTERS OFFICIALS NOTIFIED THE AGENCY INSTALLATIONS OF THE DISCUSSIONS AND GAVE THEM THE IMPLEMENTING GUIDANCE, 22 NASA EMPLOYEES, WHO CAME WITHIN THE AMBIT OF THE 90-DAY RULE, HAD BEEN GRANTED MERIT INCREASES.

IN JANUARY 1985, NASA TOOK ACTION TO APPLY THE REVISED GUIDANCE IN THE DECEMBER 11 BULLETIN AND RESCINDED THE MERIT INCREASES GRANTED THE 22 EMPLOYEES EFFECTIVE ON OCTOBER 14, 1984. WE HAVE BEEN INFORMALLY ADVISED THAT NASA HAS COLLECTED THE OVERPAYMENTS OF PAY FROM THE 22 EMPLOYEES (LESS THAN $100 FOR EACH EMPLOYEE). THE ADMINISTRATOR OF NASA ASKS WHETHER IT "WAS PROPER FOR OPM TO RETROACTIVELY CREATE A NEW CATEGORY OF EMPLOYEES WHO ARE NOT ELIGIBLE TO RECEIVE MERIT INCREASES BY SUPERSEDING THE OCTOBER 12, 1984, INITIAL GUIDANCE." ADDITIONALLY, THE ADMINISTRATOR ASKS WHETHER THE MERIT INCREASES WHICH WERE PAID TO THE 22 EMPLOYEES WERE PROPER AND SHOULD NOT HAVE BEEN CANCELLED.

OPINION

THE PMRS LEGISLATION PROVIDES IN 5 U.S.C. SEC. 5404(B) (SUPP. III, 1985) FOR MERIT INCREASES FOR EMPLOYEES COVERED BY THE PMRS SYSTEM UNDER REGULATIONS PRESCRIBED BY OPM. SEE ALSO 5 U.S.C. SEC. 5409 (SUPP. III, 1985). THE INTERIM REGULATIONS GOVERNING THE PMRS WERE PUBLISHED IN THE FEDERAL REGISTER ON MARCH 25, 1985, 50 FED.REG. 11,788, AND THE 90-DAY RULE WAS INCLUDED IN THESE INTERIM REGULATIONS, TO APPEAR IN TITLE 5 OF THE CODE OF FEDERAL REGULATIONS, SECTION 540.107(E). SEE ALSO THE FINAL REGULATIONS PUBLISHED AUGUST 30, 1985, 50 FED.REG. 35,488. THESE REGULATIONS WERE RETROACTIVELY EFFECTIVE TO OCTOBER 1, 1984.

SINCE THE ACTION BY NASA TO GRANT MERIT INCREASES CONFLICTS WITH THE OPM REGULATIONS PRESCRIBED IN IMPLEMENTING THE PMRS STATUTE, THESE MERIT INCREASES WERE MADE WITHOUT LEGAL AUTHORITY AND MUST BE CANCELLED. ALTHOUGH THE INTERAGENCY ADVISORY GROUP LETTER ISSUED IN OCTOBER 1984 DID NOT SPECIFICALLY PRECLUDE THESE INCREASES, WE NOTE THAT THIS LETTER CONSTITUTED ONLY PRELIMINARY GUIDANCE TO AGENCIES IN ESTABLISHING THE NEW PMRS WHICH HAD NOT YET BEEN SIGNED INTO LAW. IT DID NOT PURPORT TO CONSTITUTE THE REGULATIONS UNDER 5 U.S.C. SEC. 5404(B) WHICH PROVIDE THE BASIS FOR MERIT PAY INCREASES. ON THE CONTRARY, THE OCTOBER 1984 LETTER SPECIFICALLY STATES THAT "AGENCIES WILL NOT BE EXPECTED TO DEVELOP THESE PLANS UNTIL OPM ISSUES REGULATIONS ON THE PERFORMANCE MANAGEMENT AND RECOGNITION SYSTEM."

CLEARLY, THE GUIDANCE ON IMPLEMENTATION OF THE PMRS FOR PURPOSES OF5 U.S.C. SEC. 5404(B) WAS FIRST CONTAINED IN FPM BULLETIN 540-27, WHICH SET FORTH THE 90-DAY RULE. THUS IT APPEARS THE AGENCY ACTED PREMATURELY IN GRANTING MERIT INCREASES. THEREFORE, WE CONCLUDE THAT THOSE EMPLOYEES WHO MOVED INTO THE PMRS ON OR BEFORE THE EFFECTIVE DATE OF THE MERIT INCREASE AND WHO HAD RECEIVED AN INCREASE TO BASE PAY (PROMOTION, WITHIN-GRADE INCREASE, OR QUALITY STEP INCREASE) WITHIN 90 DAYS OF THE EFFECTIVE DATE OF THE MERIT INCREASE WERE NOT ENTITLED TO RECEIVE MERIT INCREASES FOR THE 1985 FISCAL YEAR.

THE OVERPAYMENTS OF SALARY WHICH RESULTED FROM PAYMENT OF THE MERIT INCREASES TO THESE NASA EMPLOYEES MAY BE CONSIDERED FOR WAIVER BY NASA IN ACCORDANCE WITH THE PROVISIONS OF 5 U.S.C. SEC. 5584 (1982). SEE ALSO 4 C.F.R. PART 91-93 (1986). IF WAIVER IS GRANTED THE AGENCY MUST REFUND THE AMOUNTS PREVIOUSLY REPAID BY THE EMPLOYEES. SEE 4 C.F.R. SEC. 92.5 (1985).

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